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!JINUTES OF THE SPECIAL PUBLIC HEmIILG HELD
EY THE EDIPlk VILLAGE COUNCIL AT THE VILLAGE
HALL AT 2:OO P.M., SATURDAY, JANUARY 18,1957,
QId THE KATTER OF AN AU3IT BY THE STATE "
PUBLIC EXPKINER
Kembers of the Council ansytering Rollcall were Bank, Dickson, Kohler, Tupa and
Bredesen. Trustee Tupa left before hearing ended.
hyor Bredesen explained to the audience that the Hearing had been called because
of the Council's hearing rumors concerning circulation of petitions for an audit
by the State Public Examiner, whereas the Council had already retained the auditing
firm of Ernst and Ernst for an audit of the records for the year 1957; that the
Council is interested in knociing the petitioners' reasons for wishing a State
Audit and that it wishes them to realize:
regularly for the past many years.
make an audit without charge and that, therefore, such an audit will be a dupli-
cation of effort and expense.
Mr. E. .:. Boyer, 4904 E. Sunnyslope Road, read a prepared statement, giving five
(1) That an audit has been made . (2) That the State Public Examiner does not 1-
reasons for the decision to petition
to join petition for a 4-year audit.
presented to Council and is attached
a plea for a State Audit, written on
not signed, was read.
the State, and inviting Council and Taxpayers
Copy of this statement, signed, was later
hereto as "Exhibit A". Later in meeting,
the stationery of fks. Harold Schaefer but
Xz. H.C. Utley, 4604 Broandale Avenue, a partner in the firm of Ernst and Ernst,
explained that Ernst and Ernst's examination of the records is concerned with
legality of transactions as well as with their mathematical correctness.
Gr. Ray Vecellio, State Public Examiner, in answer to a question from petitioner
Leonard K. Gebo, stated that the duties of the Public Examiner are to examine the
records to see: (1) That public transactions are mathematically correct; (2)
That they are proper; (3) That they are legal.
Examiner has subpoena pouers and has the use of the Attorney General's ofr'ice
for determination of the legality of transactions.
as answer to another question, Lii. Vecellio told audience that, pursuant to a laf:;
passed by the Legislature in 1357 (and fathered by himself and 1:s. Utley), Carti-
fied Public Accountants can call in the State Examiner for help if they deem it
necessary; that he has full confidence in the integrity of the firm of Ernst and
Ernst and in the efficiency of its audits.
He pointed out that the Public
.kt a later time in the meating,
Ciscussion VJ~S had most of the afternoon, nith tIessrs. Boyer, Gebo and Harley Hyre
speaking fok the petition, together with 1.k. Lewis Jones and I.3nes Roy y. Larsen and
Stanley Ewert (Ihs. Enert cited as one thing which could be considered an illegal
expenditure of funds, the pamphlet mailed to residents last year about the
proposed Park Bond Issue).
.bong those in the audience inquiring as to any specific complaints the petitioners
might have were Igessrs. George :/. Porter, Irving Iverson, Richard E. Olson and Hugh
Brenner, but nothing specific was cited except by Mrs. Etvert as set forth above.
I.:anager Hyde reviewed for audience the reasons €or an increase in appropriations
during the years 1954-1958, citing expanded services, addition of neu services,
increases in zages znd. materials, and population increase as reasons.
Curing discussion, f:essrs. Frank Pedello, ]&.A. Crinkley, I'l.1.E. Crawford, Franll-
Uhleinann, Hugh Brenner, 2nd Bo.-Jer Hzwthorne, all stated their confidence in audits
by Ernst and Ernst and objected to the cost of a duplicate audit.
Kr. G.J. Jasper, 5608 Beard, complained that his daughter had been overcharged by
$1.18 the day before Christmas, at the 50th St. Liquor Store.
!.kyor Bredesen told the audience that the matter of !tudit v~ould be on the agenda at
the regular Village (Council l.iecting to be held January 27, and closed discussion. I
(Xote: ILeeting recorded in full on
Village Clerk
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January 18, 1958
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To the Village Planager, the Mayor,
the Councilmen and all Edina taxpayers:
Steady growth on the scale which the village of Edina has experienced in recent
years imposes a special responsibility on officials of the village as well as on tax-
payers who are interested in receiving full value from their tax dollars.
Same evidence of that grouth and that responsibility is contained in the following
Pigures showing the appropriated and approved annual budgets of the village in recent
years:
1954 - $479,900 1955 - $565,670
1956 - $703,609
1957 - $800,81L,
Total $2,549,993
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1 Examtnar, yet, despite the expenditure of millions of dollars of Edina Tax money, such
R stake audit has no& been performed since 1948. A group of civic minded Edina re-
atcionts, interested solely in the maintenance of sound business practices, are recommendid
that such an audit by state examiners be made and are proceeding to secure the nec-
I omary aignatures to petition for such audit and examinatfon,
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1958 - $949,998
The total of your tax money expended under the direction of village officers during
195Lk-57 thus amounts to $2,549,993, Ern& 62 Emst, a qualified and highly regarded firin of auditors, at a costto the village
of approximately $4,500 per yea2, .However, it is our understanding that this firm shply
performs vhat is known as "cash balance audit," to determine that all figures add up
and balance out correctly,
take to determine the legality of village expenditures nor the correctness of procedures
amployed by those charged with disbursing village funds, as prescribed by Minnesota law.
These expenditures have been checked annually by
Ve have been further advised that the firm does not under-
To determine such legality requires an audit by the Minnesota Department of Public :I
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to those statements follow: i
Recent nevs reports appearing in the Minneapolis Star and the Zdina Courier in-
dfca%o a reluctance on the part of some village officials to have a state public ex-
amkners audit in Edina, Statements attributed to several officials together with answers '
i (A) STATBENT :
The village manager remarked "We are not afraid of an audit, tietve made some
mistakes, but they have been honest mistakes." Minneapolis Star January l&.*
ANSEft: I
are entitled to hotr in detail what these mistakes are, where and vhen
they occurred,'who is directly responsible and how much did these mistakes
cost the taxpayer,
It is our considered judgement that all Edina residents and tax payers i 1 I
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(E) STA~~IE :
The village manager further stated he thought signatures for petition idere
being secured by makeing Itloose statements bordering on the slanderous.f!
Edina Courier January 16, 1958
AI?§WER:
The undersigned parties who are among those sponsering the petition, are
unavare of any "loose statement bordering on the slanderous'! being m&e.
The signatures for this petition are being solicited with only one objective,
to help all Edina residents gain more complete information regarding the
disbursement of tax funds.
(C) STATEEBNT :
The Mayor said he thought circulators of the petition were not interested in knowing the true facts contradicting fantastic allegations but Itonly in
embaras sing someone1! Edina Courier January 16, 1958
AI?SI.IER:
The whole purpose of the petition for a complete public audit, after a
year period in which such audit has not been conduc'ced is not to embarass
anyone or any group, rather it is to reassure Edina taxpayers that all of
their village funds are being expended on a business like basis and entirely
within the limits prescribed by state lav, and in view of admitted past
mistakes which have been made, to enable the state examiner to offer helpful
counsel to village officials against repetition of such mistakes.
ten
(I)) STATENENT:
!!A Councihan suggested that petitioners were not aware that the cost would
be paid by them through taxation.
signers think the state will audit Edina's books free of chargeOt!
Courier January 16, 1958
AIT'WER: f
The official petition form, which is attached, furnished by the Department I
of Public Examiner on which signatures are being secured contains the followingj
statement prominently displayed at %he top of page one and at the bottom of
each succeeding page:
The Mayor said it was his opinionnany
Edina
"The entire cost of the audit, requested herein, must
be paid for, under the law, by the governmental unit mentioned below.!! \ t ! ..*
(E) STATEMENT 2 c
One councilman stated flItls mandatory that the state auditor go back for a
six year period for his reportll Edina Courier January 16. .-
fiEWER:
It is not mandatory that the state auditor go back six years, we are advised
by the state auditors' office that they will undertake an audit for as little
as one year if requested. (Our petition He cannot back more than six years.
requested going back through years 1954-5'7) *.
(F) ST.I1TDEI?T :
The Village Attorney said "The cost could be substantial!!, The Finance Director
estimated a six-year audit would cost $25,000 to $50,000.
January I&, 1958
Minneapolis Star
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AI\JSkJER : i Mr. Raymond 3. Vecellio, Minnesota Public Examiner, declares, "This estimated
cost is grossly exaggerated.
if a four-year audit (which the p&tion will request) were to exceed
$8,000 to (:;lO,OOO.~l
that Tdould approach the estimated cost stated by the finance director are
those conering the City of Ilinneapolis and the University of Minnesota
I would be very disappointed and surprised
He further stated %h6 only audits which they conduct
Ida are advised by the Department of Public Examiner that the state auditors work
In three-man teams,
ommice figure of ?30 per day per man, the services of such a team vould cost $90 per day,
or ?'A50 per five day week.
(a generous amount of time) to its auditing operations without incurring an expense of
more than $Ll,700, store operations add to the size of the job for Edina),
racently secured a state audit covering four years for just $6,500*
the cost trould run to some $11,000, based on the present estimated population, it averages
out to less than 559 per Edina resident and represents less than one-half of one per
cont of the ($2,549,993 of Edina expenditures which the audit would cover.
Cost of their services run from $22 to $37 per day, Using an
At this rate such a three-man team could devote 26 weeks
Total cost of the audit might well run less (even though liquor
Another Hinneapolis suburb
However, even if
Jt is our understanding that the work of the state auditors would determine not
only the correctness of all contracts entered into by the village during those four
yaars but 1.Jould check all expenditures and procedures relating to the letting of bids,
bond issues, assessments, legalities, etc. in relation to Minnesota statutes, and would
ovon oovor such small but important matters as expense account,mileage allowances and
miscellaneous items for village officials,
\le, the undersigned, representing many other residents who look with favor upon
R state audit, believe that our village officials should be the first to welcome such
an nudit as a matter of good business practice and in %He- interest of confirming their
judgmon-t on village fiscal matters for which they are responsible,
In summation - petitions have been circulated in the interests of the village and
its tax payers because of the impact of the following:
1. Admissions of honest mistakes and the necessity for public steps being
taken to protect against them.
2. Annual increases in the cost of our government, rapid groijth in our village
and changes and increases in village personnel require that the system
of accounting and village procedures be approved periodically by the
State Auditors office,
3. Such an audit will aid the taxpayer in giving them thorough knowledge of
village financial affairs and a firm basis for evaluating whether expend-
itures have been made in the best interests of the village.
4. Such thorough audits are accepted business procedure for any operation as
large and complex as the village of Zdina,
5. The request for an audit has been made during a period when no elections
are to be held to assure that the matter Will be given non-partison con-
sideration and be free of all political implication.
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ljo there+ respectfully invite the Village Nanager, the Mayor and a11 members
of the Councf to join with other public spirited taxpayers of our community in placing
%heir 3igna. ares on %he official peition for audit and examination by the Minnesota
Doaprkment3f public Examiner.
lrorthbJbie service for the residents of this community in keeping with the high
lle believe that in so doing they will help make possible
l.Jph those residents have placed in them.
Sincerely,
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